Treasury rouses dormant row

Treasury rouses dormant row

The Treasury was accused of hypocrisy yesterday in an increasingly acrimonious battle over the future of £10bn lying unclaimed in millions of dormant accounts.

In last month's Budget the chancellor gave banks and building societies until November to find the true owners of the money or hand it over to charity.

But at a meeting with senior Treasury officials yesterday it emerged that the government is refusing to unlock the estimated £3bn in unclaimed money which is sitting in dormant accounts at the government's National Savings.

One senior banker said yesterday: "There seems to be one rule for them and one rule for us."

The Treasury argued that the banks, which have for years used dormant accounts to boost their profit figures, were acting "disingenuously".

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A spokesman said: "The government has been supporting efforts to reunite the money in dormant accounts with society.

"All the money that goes into National Savings goes into the National Loans Fund, which in turn is used for government expenditure to benefit all of society. Unlike the banks, National Savings is not using money in dormant accounts to boost profits."

Earlier this week it emerged that high street banks, including Barclays and Royal Bank of Scotland, use the cash in dormant accounts to add to earnings figures, while HSBC confirmed it has 361,000 dormant accounts which hold about £400m in unclaimed assets. Building societies have argued that unclaimed assets are used to support lower mortgage and higher savings rates.

But the Treasury said yesterday it was determined to keep the pressure on banks to reunite unclaimed money either with its rightful owners or society at large. If by November it sees insufficient voluntary action by banks, it may push ahead with legislation.

Former social security minister Frank Field has called for the cash from dormant accounts to be donated to the victims of pension scandals.

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